March 20th, 20013

Posted: March 20, 2013 at 9:10 am

Everyone, unless you’re a bleeding heart liberal, can agree that when it comes to most, if not everything, free market businesses do things better than the government.

 

Most wouldn’t bat an eye at a large multi-million dollar business diverting funds from a conservatively invested account  to a smaller subsidiary that needs investment capital in the form of a loan, knowing that you can dictate the interest rate charged, and with the nature of the subsidiary, would have some form of assurance that the loan will be repaid.

So from a business stand point, sounds like a win/win right?

 

Large business A gets a better return on their investment, and smaller subsidiary B gets stable funding, at competitive interest rates.

Funny thing is, that sounds great for a business, and some say that government needs to be run more like a business.

 

However, when government bodies try to do things like a business, some of the public gets into an uproar.

 

Last night, the Borough Assembly approved the loan terms for the $12 million loan to the City of Homer to assist in bringing natural gas services to the southern Kenai Peninsula Community.

 

Since the assembly enacted an ordinance allowing for such a loan on February 5, 2013, there have been those in the community up in arms over this move.

Many will claim that the borough is acting outside their authority by using tax payer money for such a use, and many of most vocal opponents of this loan, concerned taxpayers who may have formed an alliance of some kind, mostly located in the Central Peninsula area forget one thing; those in Homer also pay borough taxes.

 

Why not let those in Homer who pay taxes benefit as well?

 

One benefit of the loan is purely on the return on investment that the borough will receive.  Why not move the funds from a stagnant investment fund that isn’t gaining as much interest, when the borough, though this loan, can charge a 4% interest to Homer and Kachemak City.

4% is pretty good, but when you compound that with the savings the Borough will see by converting the schools and borough owned faculties to natural gas to heat the buildings, now pardon the pun, we’re cooking with gas.

 

So I guess my big question is, what’s the difference, how is it that the same group of people say that big business is the answer, then when the government takes step to mirror big business, it’s horrible?

If it doesn’t require additional tax revenue to fund, and the borough will end up getting more money as a result, I don’t see who could possibly be against it.

 

Think about it

AMR 3-20-13

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One Comment to “March 20th, 20013”

  • BLUFF BUNNY says:

    You have missed one point, completely.

    If the Borough has 12 million in their coffers as an ‘investment fund’…it is TAXPAYERS MONEY and should alert us that they should reduce taxes!

    The Borough should NOT tax the citizens more than enough to cover their budget ( with perhaps a small amount to cover emergencies). The very fact that they seem to have at least 12 million just sitting there, should initiate a reduction in either sales taxes or property taxes.

    By taking the action they have, they open the door to all kinds of ‘worthy projects’ that would otherwise not be done, but is that the purpose of the Borough? To act as an investment bank? I think NOT.

    This particular loan WILL benefit the Homer area- but consider the WHOLE Borough- maybe if the Assembly took 12 million and used it to cover a ‘Tax Holiday’ for ALL Borough taxpayers, they would create a spending BOOM for local business and a savings for all residents- not just some.

    Encouraging residents to buy locally rather that go to Anchorage to avoid taxes would seem a fairer way to spend accrued monies. Our Assembly needs to either decrease taxes to avoid having a big ‘investment fund’, or spend savings for the benefit of ALL Borough taxpayers.

    I am opposed to their becoming an investment banker. I do not believe they have the necessary experience to be investment bankers. This sets a dangerous precedent.